Tuesday, October 5th, 2021
In some cases, asking rents are falling
Germany’s hottest housing markets are cooling off
For years, rents in Germany’s metropolises seem to have risen inexorably. But in the meantime, the particularly expensive housing markets have apparently reached a level at which further increases can no longer be enforced – with one major exception.
On Germany’s most expensive housing markets, asking rents are stagnating or are even falling in some cases. According to an evaluation by the real estate portal Immowelt, the advertised rents in Munich, Germany’s top rents for years, remained stable for the second time in a row in the third quarter of 2021. An average of 16.50 euros per square meter is required for an existing apartment. In Germany’s second most expensive city, Frankfurt, rents have already fallen for two quarters in a row – in the third quarter by one percent to 11.60 euros per square meter. According to Immowelt, rents in Stuttgart have been falling for more than a year. Rents have recently stagnated in Hamburg.
Of 14 cities examined by Immowelt, the advertised rents only increased in five. A year ago, at eight, this was still the case in the majority of metropolises. Now rents are stable in six of the cities and are falling in three of them. According to Immowelt, after the year-long increase in many large cities, further increases in the market are no longer feasible. For many tenants, the load limit has been reached. According to an analysis by the portal last September, the average asking rent for a family-friendly apartment in Munich, for example, is more than a third of the income even for academic families, but they are unaffordable for other families.
One of the exceptions to the latest developments is Berlin. There is a catching-up effect after the lifting of the rent cap by the Federal Constitutional Court. As in the second, asking rents also climb by three percent in the third quarter. In Cologne and Düsseldorf, too, rents rose by two percent. In contrast, rents in the cheaper cities in eastern Germany and in the Ruhr area remain stable. Especially in the east there is still a comparatively high vacancy rate.
However, the relaxation in the metropolises is offset by rising rents in the surrounding area and in smaller towns, which had been spared dramatic rent increases in recent years. Most recently, a survey by the Real Estate Association of Germany (IVD) for the first half of 2021 showed that asking rents for existing apartments in cities with more than 100,000 inhabitants had increased by 2.1 percent compared to the previous year. In medium-sized cities with up to 100,000 inhabitants, on the other hand, by 4.1 percent, in small towns with less than 20,000 inhabitants, even by 5.1 percent.